Oboya's status update related to COVID-19
Oboya Horticulture Industries AB (”Oboya” eller Bolaget”) continous to adjust its operations due to the outbreak and spread of COVID-19. The Company has early taken proactive measures and is now seeing changes in demands for some product lines. In total, the situation is neutral to positive in profitability since Oboya has order intake of berry boxes with lids.
Oboya’s production sites in China has experienced a lower order intake for their export to USA and continental Europe since mid March, about 30%. This is now gradually improving and we expect the market to return to normal level in 2-3 months. Chinese production represent about 50% of our total sales. This equals about 4% of Oboya’s total yearly sales, and our cost base has already been adjusted accordingly. The situation is neutral in profitability.
The Company’s sales of garden products for home growers, which is only sold in Sweden, is down by about 20% since mid March. This segment represents about 8% of total sales for Oboya.
Oboya experience a strong additional order intake on berry boxes. The berry season for 2020 has given Oboya increased order intake of about 10MSEK so far for lids to carton boxes and complete plastic boxes with a lid. The majority is from customers in Norway, but also big orders have been received from Poland and Sweden. Oboya has added working shifts and manpower to maximize existing production line, and in addition rented a secondary facility including necessary machines to meet the demand.
”I’m very happy to see that we can meet the expectations on this product and that the production is running at full speed. Hence, we will get an additional positive financial contribution in the second quarter. Also, already now we prepare for further capacity increase based on potentially even higher demand”, says Martin Dahlberg, CEO at Oboya Horticulture Industries AB.
Erik Penser Bank AB is Oboyas Certified Adviser on Nasdaq First North Growth Market. Tel: +46 8-463 83 00, E-mail: email@example.com
For more information, please contact:
Martin Dahlberg, CEO Oboya Horticulture Industries AB (publ)
Tel: + 46 76 571 88 88
This information is insider information that Oboya Horticulture Industries AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 15.00 on April 29th, 2020.